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Decapod crustaceans, like mammals, retain the ability to make new neurons throughout life. In mammals, immune cells are closely associated with stem cells that generate adult-born neurons. In crayfish, evidence suggests that immune cells (hemocytes) originating in the immune system travel to neurogenic regions and transform into neural progenitor cells. This nontraditional immune activity takes place continuously under normal physiological conditions, but little is known under pathological conditions (neurodegeneration). In this study, the immune system and its relationship with neurogenesis were investigated during neurodegeneration (unilateral antennular ablation) in adult crayfish. Our experiments show that after ablation (1) Proliferating cells decrease in neurogenic areas of the adult crayfish brain; (2) The immune response, but not neurogenesis, is ablation-side dependent; (3) Inducible nitric oxide synthase (iNOS) plays a crucial role in the neurogenic niche containing neural progenitors during the immune response; (4) Brain areas targeted by antennular projections respond acutely (15 min) to the lesion, increasing the number of local immune cells; (5) Immune cells are recruited to the area surrounding the ipsilateral neurogenic niche; and (6) The vasculature in the niche responds acutely by dilation and possibly also neovascularization. We conclude that immune cells are important in both neurodegeneration and neurogenesis by contributing in physiological conditions to the maintenance of the number of neural precursor cells in the neurogenic niche (neurogenesis), and in pathological conditions (neurodegeneration) by coordinating NO release and vascular responses associated with the neurogenic niche. Our data suggest that neural damage and recovery participate in a balance between these competing immune cell roles.